Labor Market and Labor Supply

8/12/2019 Labor Market and Labor Supply

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Chapter 16: Labor Unions

C$ The Unite" Auto &or(ers.+$ The A?LCO.

Ans%er: C Tpe: +e#inition ,a'e: --7

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1-. The "i##eren!e bet%een !ra#t unions an" in"ustrial unions is that in"ustrial unions usuall:A$ Are or'ani9e" alon' "emo!rati! lines* %hile !ra#t unions are un"emo!rati!.B$ n!lu"e %or(ers in an in"ustr* %hile !ra#t unions represent %or(ers %ith a parti!ular s(ill.C$ n!lu"e %or(ers %ith a parti!ular s(ill* %hile !ra#t unions represent %or(ers in an in"ustr.+$ ?lourish in in"ustries* %hile !ra#t unions "ominate in smaller* !ra#t pro"u!tion.

Ans%er: B Tpe: +e#inition ,a'e: --7

THE ,OTE0TAL UE O? ,O&ER

14. The mar'inal %a'e is measure" b:A$ The per!enta'e !han'e in %a'es "i)i"e" b the per!enta'e !han'e in the 2uantit o# labor emploe".B$ Total %a'es pai" "i)i"e" b the 2uantit o# labor emploe".C$ The !han'e in total %a'es pai" "i)i"e" b the !han'e in the 2uantit o# labor emploe".+$ The !han'e in total %a'es pai" "i)i"e" b the !han'e in the 2uantit o# output pro"u!e".

Ans%er: C Tpe: +e#inition ,a'e: --;

15. The mar'inal %a'e is:

A$ Chan'e in total %a'es pai" !han'e in 2uantit o# labor emploe".

B$ Chan'e in total re)enue !han'e in 2uantit o# labor emploe".

C$ Chan'e in %a'e rate !han'e in 2uantit o# labor supplie".

+$ Chan'e in total %a'es !han'e in 2uantit o# output pro"u!e".

Ans%er: A Tpe: Analti!al ,a'e: --;

16. # 1 %or(er %ill be hire" b a #irm at a %a'e rate o# @1= per hour* but a se!on" %or(er %ill be hire" onl i#the %a'e rate #alls to @< per hour* then at an emploment le)el o# %or(ers* the mar'inal %a'e is:A$ @1< per hour. B$ @1; per hour. C$ @< per hour. +$ @; per hour.

Ans%er: + Tpe: Analti!al ,a'e: --;

17. # 1= %or(ers %ill be hire" b a #irm at a %a'e rate o# @15 per hour* but the ele)enth %or(er %ill be hire"onl i# the %a'e rate #alls to @14 per hour* then the mar'inal %a'e o# the ele)enth %or(er is:A$ @4 per hour. B$ @14 per hour. C$ @154 per hour. +$ @1 per hour.

Ans%er: A Tpe: Analti!al ,a'e: --;

1;. # = %or(ers %ill be hire" b a #irm at a %a'e rate o# @5 per hour* but the 1st %or(er %ill be hire" onli# the %a'e rate #alls to @4 per hour* then the mar'inal %a'e o# the 1st %or(er is:A$ @5=4 per hour. B$ @4 per hour. C$ @4 per hour. +$ @- per hour.

Ans%er: B Tpe: Analti!al ,a'e: --;

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5. Be!ause unions #a!e a "o%n%ar"slopin' "eman" !ur)e #or labor* the optimal union %a'e rate at a 'i)enemploment le)el is al%as:A$ E2ual to the labor"eman" !ur)e. C$ Abo)e the laborsuppl !ur)e.B$ Abo)e the mar'inal %a'e. +$ All o# the abo)e.

Ans%er: + Tpe: Comple3 Un"erstan"in' ,a'e: --A$ Monopsonists ten" to o)erpro"u!e an" a)oi" mar'inal !ost pri!in'.B$ The MR, o# the last %or(er hire" is 'reater than the )alue o# the leisure time 'i)en up b that %or(er.C$ The MR, o# the last %or(er hire" is less than the )alue o# the leisure time 'i)en up b that %or(er.+$ The M,, o# the last %or(er hire" is 'reater than the )alue o# the leisure time 'i)en up b that %or(er.

Ans%er: B Tpe: Comple3 Un"erstan"in' ,a'e: -46

COLLECT/E BARFA00F

5-. n a bilateral monopol* %a'es an" emploment are "etermine" b:A$ 0e'otiation.B$ The interse!tion o# mar(et suppl an" "eman".C$ The interse!tion o# mar'inal !ost an" mar'inal re)enue pro"u!t.+$ The interse!tion o# mar'inal %a'e an" mar(et "eman".

Ans%er: A Tpe: Basi! Un"erstan"in' ,a'e: -46

54. n a bilateral monopol* the le)el o# %a'es %ill be:A$ +etermine" b ne'otiation.B$ Belo% the %a'e %here the mar'inal #a!tor !ost !ur)e interse!ts the labor "eman" !ur)e.C$ Abo)e the %a'e le)el %here the mar'inal %a'e interse!ts the labor suppl !ur)e.+$ All o# the abo)e.

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Ans%er: + Tpe: Comple3 Un"erstan"in' ,a'e: -46

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55. Colle!ti)e bar'ainin' o!!urs:A$ Bet%een parties o# a bilateral monopol in the pro"u!t mar(et.B$ &hen union members )ote on the le)el at %hi!h union "ues shoul" be set.C$ Bet%een buers o# labor an" sellers o# labor in the same mar(et.+$ &hen the 'o)ernment inter)enes to en" a stri(e an" arbitrates an a'reement.

Ans%er: C Tpe: +e#inition ,a'e: -46

56. Colle!ti)e bar'ainin':A$ n)ol)es "ire!t ne'otiations bet%een labor unions an" emploers.B$ Ta(es pla!e %hen unions !ompete to see %ho shoul" represent %or(ers in a 'i)en in"ustr.C$ O!!urs %hen emploers "etermine %hi!h union shoul" represent their %or(ers.+$ s the pro!ess b %hi!h unions "e!i"e %hi!h !ompan shoul" be the #o!us o# %a'e ne'otiations.

Ans%er: A Tpe: +e#inition ,a'e: -46

57. A mar(et that e3perien!es both stri(es an" lo!(outs at "i##erent times is most li(el !hara!teri9e" b:A$ Monopol. B$ Monopson. C$ Bilateral monopol. +$ Monopolisti! !ompetition.

Ans%er: C Tpe: +e#inition ,a'e: -46

5;. Compare" to the !ompetiti)e labor mar(et e2uilibrium* the ne'otiate" %a'e an" emploment a'reement inthe !ase o# a bilateral monopol is li(el to result in:A$ Hi'her %a'es* but lo%er output. C$ Hi'her or lo%er %a'es* but hi'her output.B$ Lo%er %a'es an" lo%er output. +$ Hi'her or lo%er %a'es* but lo%er output.

Ans%er: + Tpe: Comple3 Un"erstan"in' ,a'e: -46

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A$ Ri'ht to %or(. B$ A lo!(out. C$ Colle!ti)e bar'ainin'. +$ A stri(e.

Ans%er: + Tpe: Basi! Un"erstan"in' ,a'e: -47

THE M,ACT O? U0O0

6-. Labor unions:A$ Ha)e an impa!t on %a'es. C$ Are a ma8or politi!al #or!e in the U..B$ Ha)e an impa!t on pro"u!ti)it. +$ All o# the abo)e.

Ans%er: + Tpe: Basi! Un"erstan"in' ,a'e: -4;

64. The e##e!t o# union e3!lusion o# nonunion %or(ers is to:A$ n!rease the shorta'es o# nonunion %or(ers.B$ Lo%er the %a'es o# nonunion %or(ers.

C$ n!rease the number o# 8obs #or nonunion %or(ers.+$ All o# the abo)e.

Ans%er: B Tpe: Basi! Un"erstan"in' ,a'e: -4A$ @;I 1= %or(ers. B$ @5I 16 %or(ers. C$ @4I 1- %or(ers. +$ @11I - %or(ers.

Ans%er: B Tpe: Analti!al ,a'e: -45

;1. &hat is the optimal %a'e an" emploment le)el #rom the perspe!ti)e o# a union in ?i'ure 16.1>A$ @11I - %or(ers. B$ @5I 16 %or(ers. C$ @4I 1- %or(ers. +$ @;I 1= %or(ers.

Ans%er: + Tpe: Analti!al ,a'e: -45

;. &hat is the "i##eren!e bet%een the !ompetiti)e le)el o# emploment an" the union optimum le)el o#emploment in ?i'ure 16.1>A$ %or(ers. B$ 6 %or(ers. C$ - %or(ers. +$ Jero.

Ans%er: B Tpe: Analti!al ,a'e: -45

;-. Ho% man %or(ers are %illin' an" able to %or( at the optimal union %a'e rate in ?i'ure 16.1>

A$ 1=. B$ 1-. C$ 16. +$ 4.

Ans%er: + Tpe: Analti!al ,a'e: -45

;4. &hi!h o# the #ollo%in' in"i!ates the number o# %or(ers %ho are %illin' to %or( but are unemploe" at theoptimal union %a'e rate in ?i'ure 16.1>A$ Jero. B$ 6. C$ 14. +$ .

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Ans%er: C Tpe: Analti!al ,a'e: -45

Use the #ollo%in' to ans%er 2uestions ;5;7:

Figure 16.2

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;5. Re#er to ?i'ure 16.. &hat is the !ompetiti)e e2uilibrium %a'e an" emploment le)el>A$ @- per hour an" 4= %or(ers. C$ @4 per hour an" 6= %or(ers.B$ @5 per hour an" 4= %or(ers. +$ @- per hour an" 7= %or(ers.

Ans%er: C Tpe: Comple3 Un"erstan"in' ,a'e: -4=

;6. Re#er to ?i'ure 16. #or a unioni9e" labor mar(et. The optimal !ombination o# %a'es an" emploment#rom the unions stan"point is:A$ @- per hour an" 4= %or(ers. C$ @4 per hour an" 6= %or(ers.B$ @5 per hour an" 4= %or(ers. +$ @- per hour an" 7= %or(ers.

Ans%er: B Tpe: Comple3 Un"erstan"in' ,a'e: -4=

;7. Re#er to ?i'ure 16.. &hat is the "i##eren!e bet%een the !ompetiti)e emploment le)el an" the unionoptimum emploment le)el>A$ 1= %or(ers. B$ = %or(ers. C$ -= %or(ers. +$ 4= %or(ers.

Ans%er: B Tpe: Comple3 Un"erstan"in' ,a'e: -4=

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Ans%er: A Tpe: Comple3 Un"erstan"in' ,a'e: -4


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T ? 1==. The e2uilibrium %a'e rate is the rate at %hi!h the 2uantit o# labor "eman"e" e2uals the 2uantitsupplie".

Ans%er: True Tpe: Basi! Un"erstan"in' ,a'e: --6

LABOR U0O0

T ? 1=1. The primar ob8e!ti)e o# unions is to raise the %a'es o# union members.

Ans%er: True Tpe: Basi! Un"erstan"in' ,a'e: --7

T ? 1=. Unli(e most monopolies* unions "o not attempt to use their mar(et po%er to raise the e2uilibrium%a'e abo)e its !ompetiti)e le)el.

Ans%er: ?alse Tpe: Basi! Un"erstan"in' ,a'e: --7

T ? 1=-. A !ra#t union is a labor or'ani9ation that represents people %ith a parti!ular s(ill.

Ans%er: True Tpe: +e#inition ,a'e: --7

THE ,OTE0TAL UE O? ,O&ER

T ? 1=4. n a !ompetiti)e labor mar(et* emploers must "istin'uish the mar'inal %a'e #rom the mar(et%a'e.

Ans%er: ?alse Tpe: Basi! Un"erstan"in' ,a'e: --;

T ? 1=5. The "istin!tion bet%een mar(et %a'e an" mar'inal %a'e must be ma"e be!ause o# the "o%n%ar"slope o# the labor "eman" !ur)e.

Ans%er: True Tpe: Basi! Un"erstan"in' ,a'e: --;

T ? 1=6. Monopolists in the labor mar(et e2uate the mar'inal %a'e %ith the mar'inal re)enue pro"u!t.

Ans%er: ?alse Tpe: Basi! Un"erstan"in' ,a'e: --

Labor Market and Labor Supply

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